Back to AI Work
In my previous post, I wrote a lot about how AI will speed up and eliminate the majority of repetitive cognitive work. This will then free a lot of talent for innovation and project direction, building new services and products for companies to expand and grow faster than before. This gives employees operation in a newly innovative fashion all the resources and scale of a large corporation.
There's also the flipside of this that I envision, which is a lot of people starting their own startups that allow this innovation in more freeform without being restrained by various company requirements. We can see this already happening in software, where AI being especially skilled at software has, for better or worse, flooded the software startup space with a myriad of products. This, however, comes with the disadvantage of having to worry about funding, acquisition, stability, scaling, and all the other pain points of entrepreneurship. It also prevents innovators that may not be explicitly business minded from creating their ideas easily.
These two paradigms are where the future AI development stand if our existing business practices don't compromise or evolve rapidly. I see this dilemma stifling many of my peers, in the sense that they want to innovate, and they always have great ideas. However, startups are too hard, and require too much risk and sacrifice. Instead, they will opt for a stable corporate job - which comes with the stifling of that innovation that drives them. There should not be a world where ideas are easier than ever to build, but the ones with said ideas have to hope that large corporations open their doors to them, or gamble on a venture that may not work out.
A Compromise
To me, the solution to this dilemma seems plainly obvious. Imagine, if you will, a company that uses the scale and resources of a large corporation, but is open to innovators to create any of their ideas. Think of it, at its core, an MVP (Minimum Viable Product) factory. This gives our company a (terrible) name - MVP Factory. After the ideators create their MVPs, they can go down one of two paths.
- Build the product into a startup. MVP Factory staff who have financial / business experience can leave to serve on the executive team to advise scaling and finances, and can return to MVP Factory afterward. MVP Factory would allow the spinoff company to own relevant IP, but also maintain a large investment / share of the startup in return for the funding and development that was provided.
- Develop the product internally. This would then move the product to Stage 2, which is to foolproof and test the viability of the product. From here, MVP Factory could serve a few different use cases:
- Identify other corporations that would be interested in buying the product or would benefit from having the developed product - operating similar to a startup acquisition but it's primarily a purchasing of IP.
- A less viable path, which is to sell the product directly. However, this would require MVP Factory to be a "sell everything" type of company, which is not a good way to run a business.
Let's Poke Some Holes
Now, I should include some due diligence on why this would even be a viable business prospect. In both cases, MVP Factory is leveraging innovations to either gain a large stake in a startup, or to directly sell contracts and IP to a business.
In the first case, MVP Factory operates similar to a VC firm. There is one key difference, in that a VC firm will look for ideas or founders to invest money into. On the other hand, MVP Factory will hire the innovators directly to constantly churn out and develop ideas, with the talent, vetting, and advising provided in-house. I envision that this process will lead to far more successful ideas being produced, as well as laying groundwork for more successful startups than simply building off some initial investment. In any case, VC firms are successful enough, so a company that generates revenue in a similar fashion but sets up more successful companies should, in theory, make even more money.
In the second case, MVP factory is generating revenue similar to how many startups make money, either via acquisition or contract-based development to deliver a more suitable MVP for a company. Once more, the primary difference is the level of expertise and resources that would be provided to the "startup" within the company, allowing for more successful or finely tuned acquisitions.
Both these assumptions may stand strong on their own as they build off of existing business structures, but the primary counterargument here is that MVP factory would make significant investments into MVPs that are unsuccessful and thereby bleed money. One may further argue that hiring founders as employees is another significant source of drain, as opposed to the traditional method of investing a minimal amount in a startup.
My counter to this is threefold. First, it is evident that every VC firm makes significant investments into unsuccessful MVPs 90% of the time. Not only would MVP Factory operate in similar fashion to a VC firm by relying on successful investments to pay out, but the larger organization would allow for a flexible reallocation of talent to help grow successful investments faster than simply investing.
Second, there is an assumption that I made at the beginning that I will restate: AI will allow for faster prototyping and idea iteration than before. While it may be the case today that a great founder may have 2 or 3 excellent business ideas in 10 years, that will not remain the case. There are ideators out there today that will be able to produce 10x or 100x that number of ideas in the same amount of time with AI alongside them. Looking even further, my primary thesis regarding the future of work with AI will become relevant; AI will replace repetitive cognitive labor so entirely that talented individuals will move to ideating about complex unstructored opportunities in the chaotic world around them. This shift in talent will only fuel the talent base for the MVP Factory.
Third, with regard to hiring innovators as employees, I will quote the age-old VC adage: "Invest in the founder, not the business." If MVP Factory can find these innovators that can successfully generate these excellent ideas faster than anyone else, pivot fast, and sell their ideas well, why can't MVP Factory "invest" in the founders by simply paying them? A skeptic might argue that stability eliminates the drive to succeed that many founders have, but I don't share this opinion at all due to what I believe are the psychological traits that drive founders (up for a discussion in a future blog post).
Closing Thoughts
It is imperative that the way we evolve our business practices grow to complement the growth of the newest technological revolution that is AI. Until every major corporation has in-house MVP labs that promote innovation without restriction, and until creating a startup has no worry of risk, no lack of talent, and no lack of financial expertise, MVP Factory could serve as the primary liason for which these services are dispensed; it will be the ideal combination of innovation, flexibility, talent, and growth.